COINER OF “THE MARGINAL REVENUE CURVE”: ROBINSON’S “CLASSIC EXPOSITION OF THE THEORY OF THE FIRM”

ROBINSON, Joan. The Economics of Imperfect Competition. London: Macmillan, 1933. Thick octavo, original blue cloth. $900.

First edition of Robinson’s theory of a middle ground (“imperfect competition”) somewhere between monopolies and perfect competition, which would explain unemployment.

John Maynard Keynes’ biographer relates that Joan Robinson (an ardent disciple of Keynes) “and several others formed a ‘circus’ which met weekly for the discussion of the Treatise, and R. F. Kahn retailed to Keynes the results of our deliberations… He had a high regard for Mrs. Robinson’s intellectual powers” (Harrod, 433). She later focuses on an important point that arose during these weekly discussions: “Keynes visualized too simple and direct a mechanism whereby changes of investment were supposed to react on prices”— a concept she touches upon in her two chapters on “Price Discrimination,” along with her famous “marginal revenue curve.” Her main premise, however, departs from contemporary economic theory by treating monopolies in given industries as the general case and perfect competition between multiple small firms as a special case. A monopolistic firm could raise prices and lower production without affecting margins, which explained the rampant unemployment in England at the time. “Though she later disparaged Imperfect Competition as ‘scholastic’ and ‘orthodox,’ it became the classic exposition of the theory of the firm for decades” (Niehans, 304). Without rare original dust jacket. Occasional pencil marginalia.

Light rubbing to spine and extremities. A very nearly fine copy.